A report from Housing Wire. "It looks like borrowers who don’t fit neatly into Fannie Mae and Freddie Mac’s lending criteria could soon be running out of options if they want to buy a house. Over the last week, many (if not all) of the biggest lenders specializing in lending to borrowers outside the Qualified Mortgage lending box paused their activities due to uncertainty in the market. And now it appears that Federal Housing Administration lending as we know it is disappearing from the market too."

"Scuttlebutt in the mortgage industry over the last few days pointed to lenders raising their FHA requirements, and that’s just what appears to be happening. In fact, it seems that many lenders are raising their minimum FICO scores for FHA loans to as high as 660, which would prevent a large section of borrowers from accessing an FHA loan. For lenders and the secondary market, it’s all about pricing the risk. They don’t want to lend to super-risky borrowers because those borrowers are far more likely to default on their loans and the lenders and investors would end up losing a lot of money per loan."

"There are millions of people who just lost their jobs as the coronavirus shuts down the country. And many more people are expected to hit unemployment in the coming weeks. Many of those people don’t have massive amounts of money in savings and that’s going to be an issue for them and for everyone they owe money to. That will likely lead to massive mortgage delinquencies. Here’s how the mortgage industry laid out that problem in a letter sent to federal decision-makers earlier this week: 'To give one a sense of scale, if 25% of the nation receives forbearance for only 3 months, servicers will have to cover payments of roughly $36 billion. If they received it for 9 months, then the cost would exceed $100 billion.'"

The Wall Street Journal. "Among the hardest-hit victims of funding-market troubles have been mortgage-investment firms. What happens to them will shed light on what may be in store for the rest of the market. A handful of real-estate investment trusts that buy mortgages or mortgage-backed securities, called mortgage REITs, have reported margin calls by the banks that finance them. These firms are doubly exposed to the market right now."

"If banks are indeed lenient with the mortgage REITs, it is a hopeful sign for the containment of risk to individual companies, for banks’ risk management, and for the Fed’s backstopping success. It also would be an important read-through for banks’ exposures to a much wider range of nonbank lenders through other forms of leverage, such as warehouse financing, which clients draw on to fund loans until they are sold via securitizations. 'Liquidating collateral doesn’t behoove anybody,' says Eric Hagen, analyst at KBW. 'Banks are certainly capable of doing that, but it’s not what they want to do.'"

The World Property Journal. "'The U.S. housing market has entered truly uncharted territory, shaken by the COVID-19 pandemic and a corresponding, sharp economic contraction that has already caused millions of Americans to lose their jobs,' said Zillow Economist Jeff Tucker. 'Rock-bottom mortgage rates have provided some small financial relief for homeowners and buyers, but it hasn't been enough to avoid a slowdown. The big question at the moment is to what degree measures being taken by local, state and national legislators will help limit the number of foreclosures in the months ahead.'"

The Commercial Observer. "The niche market got a shock earlier this week when a Related subsidiary, Related Commercial Portfolio, warned that it could default on a roughly $200 million bond payment due in September. The Related subsidiary, which has issued one bond on the Tel Aviv Stock Exchange, was facing liquidity issues due to the outbreak, the company reported in its year-end financial statement on March 24, and would be unable to refinance the debt if market conditions didn’t improve in time. During the call, a representative for Related said they expect their residential tenants to be in a better position to pay rent, as their inventory primarily consists of luxury units."

The Albuquerque Journal in New Mexico. "As in many other tourist destinations in the United States, a large portion of Santa Fe’s housing market is short-term rentals. But the demand for these vacation rentals, as in so many other sectors of the economy, has dropped off dramatically. Shane Morris tracks online traffic for short-term rentals across the country and said the market has evaporated in a short span of time. In Santa Fe, he said, internet searches for terms like 'places to stay in Santa Fe' fell by 97%. 'When you lose 97% of your searches on a term, that’s deadly,' he said. 'They’ve all cratered in the past two weeks.'"

"Morris said those who own multiple short-term units will be affected most by the lack of demand. One of those people is Mary Ann Kaye, who owns 12 units. 'We went from a sold-out situation to a ghost town situation,' she said. Her company purchased all the units several years ago and converted them from apartments into short-term rentals. Now, she has to figure out how to pay for a dozen mortgages with few or no guests."

"'We made all our payments for the month of March, but if this continues into April and May, it’s going to be really difficult,' said Kaye. In response to the crisis, many owners of short-term rentals are attempting to lease their units month to month to make up the difference, listing their properties on such websites as Craiglist. One of those owners is Brenda Wall, who has mortgages on two properties she used as short-term rentals. However, with most New Mexicans now ordered to stay home, she remains unsure she can rent them out for the long term. Wall said she took out the cash value on one of her life insurance policies – around $16,000 – to avoid foreclosure on her properties."

"Based on statistics from a study last year, around 5% of homes in Santa Fe were listed on Airbnb last November alone, a large industry supported by various managers, cleaners and other employers. Morris said the potential for so many closures is reminiscent of the Great Recession and that he expects a spike in foreclosures over the next few months. 'It feels like 2008, where banks did not understand the risks with lending money to people who owned so many properties,' he said."

The Orange County Register in California. "Coronavirus is slowing Southern California homebuying, with new signed sales contracts for existing homes plummeting 16% in the past week. Looking at conditions as of Thursday, March 26, ReportsOnHousing found 10,642 new escrows opened in the previous 30 days in San Bernardino, Riverside, Orange and Los Angeles counties, a 16% drop in demand from a week ago. Sellers, on the other hand, didn’t react as negatively to all the coronavirus news, listing 23,292 residences for sale. The good news is there’s no sign of panic selling and surging supply."

The Marin Independent Journal in California. "The coronavirus pandemic is threatening to put a damper on the Marin County real estate market as it enters its normally busy spring season, local brokers say. 'We’re all in uncharted territory right now,' said Thomas Henthorne, a Marin agent. 'The market was hot before this happened. I had my busiest winter and early spring ever. But now it’s all put on hold.'"

From Curbed Boston in Massachusetts. "New Massachusetts Association of Realtors numbers for February how a marked decline in single-family home sales compared with February 2019, but a generally healthy market for sellers due to a lack of inventory of available homes for buyers. As for single-family prices, the median was up 4.2 percent annually in February, to $395,000. That’s a rare bright spot for buyers as it was the first time in nine months where the median sales price was below $400,000."

The Northwest Arkansas Business Journal. "Recent reporting would lead most people to believe the Washington County housing market is in fabulous shape and that everything is selling. While there are some bright spots, there are plenty of properties that are not selling. Student housing is overbuilt. We can already see signs of significant softening with the new mega-student housing projects. We have too many expensive new four-bedroom apartments for affluent students from the Dallas-Fort Worth area, while at the same time, university enrollment has taken its first dip in 20 years. And we are seeing fewer Texas students."

"There are too many new houses on small lots priced from $500,000 to $600,000. Couple this excess supply with garage-centric, earth tone-colored builder designs that look exactly like they came out of 2004, and it’s no wonder they aren’t selling. Traditional design is one thing, but haven’t we had enough craftsman-styled tapered columns by now?"

"We have too many multifloor expensive townhouses in town. When you consider the typical buyer who wants to live close-in — and can afford to — is at least 55 years old, it baffles me why developers would keep building narrow units with too few windows and bedrooms on the second and third floors. No wonder they don’t sell. Older people want single-floor living."

"We have too many modern, expensive houses and townhouses in south Fayetteville. When you go modern, you immediately lose about 95% of the market for the people who can afford houses of at least $400,000. When those units are built in the areas with the highest crime rates, you lose most of the two-income families with children that could actually afford to buy them. When it costs no more (and maybe even less) per square foot to live in the suburbs with the best-rated schools, traditional designs, larger yards and less crime, it’s no wonder sellers are having a tough time finding enough urban pioneers to buy these expensive south Fayetteville homes."

"And when will builders here stop using the cheapest HVAC systems made, installing inoperable windows in all but the bedrooms where they have to open by code, and rough cedar columns on houses that shouldn’t have them? And when will they stop using the 'peel and stick' fake rock, or even worse, brick applied over the lower 2 feet of house and foundation where it can create water problems and future rot? Dang. I’m out of space here. And I’m just getting started."